Correlation Between Synchrony Financial and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Synchrony Financial and McEwen Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Synchrony Financial and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synchrony Financial and McEwen Mining, you can compare the effects of market volatilities on Synchrony Financial and McEwen Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Synchrony Financial with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchrony Financial and McEwen Mining.
Diversification Opportunities for Synchrony Financial and McEwen Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Synchrony and McEwen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Synchrony Financial and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Synchrony Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Synchrony Financial are associated (or correlated) with McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Synchrony Financial i.e., Synchrony Financial and McEwen Mining go up and down completely randomly.
Pair Corralation between Synchrony Financial and McEwen Mining
Assuming the 90 days trading horizon Synchrony Financial is expected to generate 0.58 times more return on investment than McEwen Mining. However, Synchrony Financial is 1.71 times less risky than McEwen Mining. It trades about 0.08 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.04 per unit of risk. If you would invest 3,480 in Synchrony Financial on November 5, 2024 and sell it today you would earn a total of 3,439 from holding Synchrony Financial or generate 98.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Synchrony Financial vs. McEwen Mining
Performance |
| Timeline |
| Synchrony Financial |
| McEwen Mining |
Synchrony Financial and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synchrony Financial and McEwen Mining
The main advantage of trading using opposite Synchrony Financial and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchrony Financial position performs unexpectedly, McEwen Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Synchrony Financial vs. Broadcom | Synchrony Financial vs. Geely Automobile Holdings | Synchrony Financial vs. G5 Entertainment AB | Synchrony Financial vs. AcadeMedia AB |
| McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Toyota Motor Corp | McEwen Mining vs. Reliance Industries Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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